Supreme Court considers if banks can use SARFAESI Act for NBFC loans not covered under it
The case concerns whether a bank can invoke the SARFAESI Act to recover debts assigned to it from Non-Banking Financial Companies (NBFCs) that were not covered under the Act at the time the debt was created. The Court is hearing appeals from Kotak Mahindra Bank and other borrowers regarding the validity of such recovery proceedings.
Appellants: Kotak Mahindra Bank Limited (in Civil Appeal No. 8531 of 2015); Poorti Rent a Car and Logistics Pvt. Ltd. and its Directors (in the appeal arising from SLP (C) No. 9399 of 2022). Respondents: Trupti Sanjay Mehta and others; Anil Manohar Sable and Jayashree Anil Sable. Bench: Justice Sanjay Kumar.
- The Court is considering the issue of whether a bank can take recourse to the SARFAESI Act for recovery of a debt assigned from a financial entity not governed by the Act at the time of creation.
- The Court notes that in the Mehta case, it previously directed the Mehtas to deposit ₹63,89,814/- to regain possession, which they did not do, and later accepted an interim arrangement for a ₹40 lakh deposit, which was executed in 2017.
- The Court notes that in the Sable case, it recorded an undertaking from Kotak Mahindra Bank not to take coercive steps, and the Sables remain in possession.
- The Court notes that in the Poorti Rent a Car case, the secured property was sold in 2023 after the Bombay High Court dismissed the appellants' writ petition.
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Document details
| Official title | Banks Can Invoke SARFAESI For Loans Acquired From NBFCs Not Covered Under Act : Supreme Court |
| Source body | Supreme Court of India — orders & judgments |
| Reference number | SLP(C) No. 33113/2018 Mr. Satyajit A. Desai, Adv. Mr. Sachin Patil, Adv. Mr. Sachi |
| Status | closed (order) |
| Year | 2026 |
| Closing date | — |
| Documents | 1 |